Mentoassociates.com – Legal Articles

In the corporate ecosystem, while most directors and officers operate in good faith, instances of fraudulent conduct can and do arise—often leaving creditors, investors, and minority shareholders in peril. Section 339 of the Companies Act, 2013 addresses such misconduct squarely, empowering courts to pierce the corporate veil and hold individuals personally liable for the fraudulent conduct of business.

What Does Section 339 Say?

Section 339 empowers the National Company Law Tribunal (NCLT) to declare that individuals (including directors, managers, officers, or any other persons involved) who were knowingly party to the conduct of business with an intent to defraud creditors or for any fraudulent purpose, can be personally liable for the company’s debts or liabilities, without any limitation of liability.

Key highlights:

• The section applies during the course of winding up proceedings.
• Liability is civil, but actions under Section 339 may trigger criminal prosecutions under Section 447 (Punishment for fraud).
• The scope includes fraudulent dealings with creditors, concealment of assets, or falsified records.

Who Can File and When?

Typically, the Official Liquidator or any creditor or contributory of the company may invoke Section 339 by making an application to the NCLT during the winding-up proceedings.

However, fraudulent conduct may also come to light during proceedings under:

• Section 241–242 (Oppression and Mismanagement),
• Insolvency proceedings under IBC, or
• Through investigation reports under Section 212 or 213.

Dispute Resolution Mechanism

Disputes under Section 339 are resolved through the National Company Law Tribunal (NCLT), which serves as the primary judicial forum for company law matters.

Steps Involved:

1. Filing Application: The creditor, contributory, or Liquidator files an application during winding-up.
2. Notice and Response: Respondents are given notice and opportunity to reply.
3. Hearing and Evidence: Tribunal assesses whether there was knowledge and intention to defraud.
4. Order for Liability: If satisfied, the NCLT can direct that such persons be personally responsible for specified debts.

In some cases, where criminal fraud is alleged, the matter may be referred to the Serious Fraud Investigation Office (SFIO), and prosecution under Section 447 may run parallel.

Landmark Judgments

• Official Liquidator of Ajanta Pharma Ltd. v. Ajanta Pharma Ltd. & Ors.
  The NCLT held directors liable under Section 339 for siphoning funds prior to winding up.
• Union of India v. Hyderabad Industries Ltd.
  The Supreme Court reiterated that Section 339 is a remedial provision that ensures individuals cannot misuse the corporate shield to commit fraud.

Best Practices for Directors and Officers

• Maintain transparent financial records.
• Avoid transactions that can be viewed as prejudicial to creditors, especially during insolvency.
• Act in good faith and in the best interest of the company, avoiding any conflict of interest.
• Seek legal advice promptly when faced with insolvency or stakeholder disputes.

Final Thoughts

Section 339 of the Companies Act, 2013 is a powerful safeguard designed to prevent misuse of the corporate form. It provides a robust legal remedy for creditors and stakeholders by allowing the corporate veil to be lifted in cases of fraud.

In today’s environment of increasing compliance scrutiny, understanding and implementing good governance practices is not just advisable—it’s essential.

? If you’re a stakeholder facing similar issues or advising companies in distress, understanding the legal nuances of Section 339 can make all the difference.

In India’s thriving business landscape, partnerships remain a popular choice for entrepreneurs due to their flexibility, ease of formation, and operational convenience. However, like any business relationship, partnerships are not immune to disputes. Understanding the dispute resolution framework under the Indian Partnership Act, 1932, becomes critical for partners seeking to safeguard their interests.

Sources of Disputes in Partnerships

Disputes among partners often arise from:

• Profit sharing disagreements
• Breach of fiduciary duties
• Unauthorized transactions
• Management and operational differences
• Admission or retirement of partners
• Dissolution of the firm

The Indian Partnership Act, 1932 provides a comprehensive framework to address these issues, emphasizing both internal mechanisms and legal recourse.

Contractual Autonomy: The Partnership Deed

The cornerstone of dispute resolution in partnerships is the Partnership Deed. The Act allows partners considerable autonomy to define terms relating to:

• Dispute resolution mechanisms (mediation, arbitration, etc.)
• Profit sharing ratios
• Management responsibilities
• Exit clauses

A well-drafted deed often pre-empts litigation by providing clarity and minimizing ambiguities.

Statutory Remedies under the Act

While the deed plays a primary role, the Act offers statutory remedies in the absence of a written agreement:

• Section 9 – Partners are bound to carry on business to the greatest common advantage and act in utmost good faith.
• Section 13 – Entitles partners to share equally in profits and contribute equally to losses, unless agreed otherwise.
• Section 32-33 – Provisions for retirement, expulsion, and dissolution.

In cases where internal resolution fails, partners can approach the civil courts for relief based on these statutory rights.

Alternative Dispute Resolution (ADR)

The modern legal environment increasingly promotes ADR mechanisms to resolve partnership disputes:

• Mediation: Preserves business relationships while providing a collaborative resolution.
• Arbitration: If the partnership deed contains an arbitration clause, disputes are referred to arbitration under the Arbitration and Conciliation Act, 1996.
• Conciliation and Negotiation: Flexible, informal methods to achieve amicable settlements.

Many partnership disputes are best resolved through ADR, avoiding prolonged litigation.

Judicial Precedents

Several Indian courts have emphasized the fiduciary duties among partners and the importance of good faith:

• Dulichand Laxminarayan v. CIT (1956 AIR 354 SC) — Clarified the nature of partnership as a relation and not a separate legal entity.

• Narayanappa v. Bhaskara Krishnappa (AIR 1966 SC 1300) — Highlighted the right of a partner to inspect accounts and emphasized fiduciary obligations.

• Suresh Kumar Sanghi v. Amit Kumar Sanghi (2011 SCC OnLine Del 2111) — The Delhi High Court recognized the role of ADR mechanisms in expeditious settlement of partnership disputes.

Dissolution and Final Settlement

In severe cases where continuation of the partnership becomes untenable, dissolution may be the ultimate remedy:

• Section 44 of the Act provides for dissolution through court intervention on grounds such as misconduct, breach of deed, or unsound mind.
• Upon dissolution, assets are liquidated and liabilities are settled as per Section 48.

Key Takeaways for Partners

• A well-drafted partnership deed is the first line of defense.
• Maintain proper records and transparency in operations.
• Consider ADR before resorting to litigation.
• Be mindful of fiduciary duties and statutory obligations.

Conclusion

Dispute resolution under the Indian Partnership Act, 1932 is a blend of contractual freedom, statutory framework, and judicial oversight. With careful planning, transparent dealings, and a collaborative mindset, many partnership disputes can be effectively managed or entirely avoided.

If you found this helpful, feel free to share your thoughts or experiences with partnership disputes. Connect with me for more insights on business law, dispute resolution, and corporate governance.

Mento Isac

Advocate

In the complex world of corporate governance, disagreements among shareholders and directors are not uncommon. However, when such disputes escalate into cases of oppression and mismanagement, the Companies Act, 2013 provides a powerful mechanism for minority shareholders to seek redress.

Understanding Oppression and Mismanagement

Oppression refers to conduct that is burdensome, harsh, or wrongful and infringes upon the rights of minority shareholders.

Mismanagement, on the other hand, implies misuse or abuse of powers resulting in prejudice to the interests of the company or its members.

Legal Framework: Sections 241 to 246 of the Companies Act, 2013

These sections collectively lay down the procedural and substantive law for addressing such grievances:

• Section 241: Allows a member to apply to the National Company Law Tribunal (NCLT) if the affairs of the company are being conducted in a manner prejudicial to public interest or oppressive to any member or if there is mismanagement.

• Section 242: Empowers the NCLT to pass wide-ranging orders, including:
  • Regulation of conduct of affairs
  • Purchase of shares by other members
  • Termination or modification of agreements
  • Removal of managing directors

• Section 243: Disqualifies a person from being reappointed as director if removed by the Tribunal.

• Section 244: Specifies who can apply:
  • In a company with share capital: At least 100 members or 1/10th of total members or 1/10th of issued share capital
  • Tribunal can waive these requirements in appropriate cases

• Sections 245 & 246: Extend remedies through class action suits, enabling collective redress for members and depositors.

Recent Judicial Insights

Courts and tribunals have repeatedly emphasized that not all shareholder disagreements qualify as oppression. There must be a lack of probity, abuse of power, or unfair prejudice. Key judgments like:

• Shanti Prasad Jain v. Kalinga Tubes Ltd. laid down early principles of what constitutes oppression

• Cyrus Mistry v. Tata Sons Ltd., clarified the standards for relief and the limits of judicial interference in board decisions

Practical Considerations for Stakeholders

• Document Everything: Maintain clear records of board meetings, decisions, and communications.

• Explore Internal Remedies: Attempt resolution through shareholder agreements, mediation, or arbitration before invoking statutory remedies.

• Legal Threshold: Ensure eligibility under Section 244 before approaching NCLT.

• Tailored Relief: Petitioners can request specific reliefs suited to the nature of the grievance.

Conclusion

Sections 241 to 246 of the Companies Act, 2013 aim to balance the rights of majority and minority stakeholders, ensuring that corporate democracy is not reduced to majoritarian tyranny. By providing statutory remedies, the law empowers shareholders to seek justice without undermining business stability.

Disputes in closely held companies often intersect personal and professional boundaries — making early legal advice and strategic action essential.

Introduction:
The Limited Liability Partnership (LLP) model has become a preferred structure for many businesses in India due to its flexibility and limited liability features. However, as LLP jurisprudence continues to evolve, several key judgments have shaped the legal understanding around partner liabilities, taxation, fraud, and procedural compliance.

Here’s a quick summary of the 5 most important LLP judgments every lawyer, entrepreneur, or compliance professional should be aware of:

1) Deloitte Haskins & Sells LLP & Ors. v. Union of India & Ors. (2021, Delhi High Court)

Core Issue: Can partners of an LLP be held personally criminally liable for fraudulent activities?

Key Takeaway: The Delhi High Court clarified that while LLPs offer limited liability, partners may lose this protection where fraud, misrepresentation, or criminal intent is involved. Limited liability does not shield individuals from personal responsibility for fraudulent acts.

Why It Matters: This judgment strikes at the heart of the limited liability doctrine and serves as a warning that LLPs cannot be used as a cover for wrongful conduct.

2) DCIT v. M/s. Dhanya Agroindustrial LLP (2019, ITAT Bengaluru)

Core Issue: Whether conversion of a partnership firm into an LLP triggers capital gains tax.

Key Takeaway: The Income Tax Appellate Tribunal held that, provided conditions under Section 47(xiiib) of the Income Tax Act are met, such conversions may not attract capital gains tax.

Why It Matters: This ruling offers clarity on tax neutrality during conversion, a critical factor for businesses considering moving from partnership to LLP format.

3) In Re: Desi Urban LLP (2020, NCLT Mumbai)

Core Issue: Compounding of offences under the LLP Act for delayed filings.

Key Takeaway: The NCLT allowed compounding for non-filing of statutory returns, highlighting that technical lapses can be rectified through the compounding mechanism without attracting harsh penalties.

Why It Matters: Important post-2021 amendment, as many procedural offences have been decriminalized and shifted to in-house adjudication.

4) Jet Airways (India) Ltd. Insolvency Proceedings (NCLT / NCLAT)

Core Issue: Whether LLPs are subject to insolvency proceedings under IBC.

Key Takeaway: While primarily applicable to companies, the insolvency framework has gradually included LLPs as “corporate persons” who can be subjected to insolvency proceedings under the Insolvency and Bankruptcy Code (IBC), 2016.

Why It Matters: Reinforces that LLPs, like companies, are not immune to insolvency actions.

5) Sahara Q Shop Unique Products Range LLP v. State of Maharashtra (2017, Bombay High Court)

Core Issue: Application of state legislation and regulatory controls over LLP activities.

Key Takeaway: The court upheld that certain regulatory controls, including state laws, may apply to LLPs depending on the nature of their business.

Why It Matters: Clarifies that LLPs are not exempt from state-level regulatory compliance, despite being governed by a central statute.

Conclusion:

Though the LLP Act, 2008 is relatively young, its interpretation by Indian courts is rapidly shaping the legal landscape. Understanding these key judgments is crucial for risk management, drafting robust LLP agreements, and advising clients with confidence.

As LLP jurisprudence grows, every legal practitioner should stay updated not just with the Act, but with how the courts are applying it.

The Limited Liability Partnership (LLP) model has gained popularity in India due to its hybrid nature—offering the benefits of both a company and a partnership firm. However, disputes are inevitable in any business structure. The LLP Act, 2008 lays down a structured yet flexible mechanism to address conflicts that may arise among partners or between the LLP and third parties.

Key Provisions for Dispute Resolution

1. LLP Agreement as the Primary Tool
Section 23 of the LLP Act emphasizes the importance of the LLP Agreement. It governs mutual rights and duties between the partners and between the partners and the LLP. In case of a dispute, the LLP Agreement is the first port of call. A well-drafted agreement usually contains clauses for mediation, arbitration, or other dispute resolution mechanisms.

2. Default Provisions in Absence of an LLP Agreement
Where there is no agreement or if the agreement is silent on a matter, the First Schedule to the LLP Act applies. This schedule contains default provisions that may not always be suitable in complex commercial arrangements, hence the emphasis on customizing the LLP Agreement.

3. Arbitration and Conciliation
LLPs are permitted to incorporate arbitration clauses under the Arbitration and Conciliation Act, 1996. This is a preferred route as it is quicker, more confidential, and less adversarial than court litigation. Institutional or ad hoc arbitration clauses can be used.

4. Judicial Remedies
In serious disputes involving fraud, oppression, or mismanagement, partners may approach the National Company Law Tribunal (NCLT) or civil courts, depending on the nature of the grievance. However, recourse to the courts is generally considered a last resort.

Penal Provisions under the LLP Act

While the LLP model encourages ease of doing business, it also includes specific penal provisions to ensure compliance:

1. General Penalty – Section 74
Failure to comply with provisions where no specific penalty is prescribed may attract:

• Fine up to ?5 lakh, and
• Additional fine up to ?50 per day for a continuing default.

2. False Statements – Section 35
Making false statements in required documents, with intent to deceive:

• Imprisonment up to 2 years, and
• Fine between ?1 lakh and ?5 lakh

3. Fraud – Section 30
Acts intended to defraud involve:

• Imprisonment up to 5 years, and
• Fine between ?50,000 and ?5 lakh
  (Cognizable offence)

4. Non-Filing of Statements – Sections 34 & 35
Delay or failure to file Form 8 (Statement of Account and Solvency) and Form 11 (Annual Return):

• ?100 per day for each delay
• Additional penalties may apply to designated partners

5. Business with Less than Two Partners – Section 7(6)
If an LLP continues business for more than 6 months with only one partner:

• The sole remaining partner becomes personally liable for obligations incurred during that period.

6. Compounding of Offences – Section 39
Most offences under the LLP Act are compoundable, except serious offences involving fraud or imprisonment.

2021 Amendment Note:
The LLP (Amendment) Act, 2021 introduced decriminalization of minor offences, a new class of “Small LLPs,” and an In-House Adjudication Mechanism (IAM) for technical lapses.

Conclusion

Dispute resolution under the LLP Act relies heavily on proactive legal drafting and mutual cooperation. The inclusion of arbitration and the ability to tailor conflict resolution methods within the LLP Agreement offer flexibility and efficiency. However, the Act also includes a firm framework of penalties to ensure discipline and compliance.

For entrepreneurs, investors, and legal professionals, understanding these provisions is essential not just for resolving disputes—but for avoiding them altogether.

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, has played a crucial role in protecting the interests of micro and small enterprises. Various judicial pronouncements have clarified its provisions and established precedents. Below are some significant case laws that have shaped the interpretation of the MSMED Act:

• The Indur District Co-operative Marketing Society Ltd. v. Microplex (India), Hyderabad (2016) (3) ALD 588

The Court held that the supplier need not be registered or have a registered office within the jurisdiction of the Facilitation Council; it is sufficient if the supplier is located within the Council’s jurisdiction.

• Silpi Industries v. Kerala State Road Transport Corporation and Anr. (2021) SCC OnLine SC 439

The Supreme Court ruled that registration under the MSMED Act at the time of contract performance is essential.

• Uttarakhand Power Corporation Ltd. v. Mahaveer Transmission Udyog Pvt. Ltd.

The Court, relying on Goodyear India Limited v. Norton Intech Rubbers Pvt. Ltd., held that deposits under Section 19 must be made in cash, and alternative modes such as bank guarantees are not permissible.

• Kotak Mahindra Bank Ltd. v. Girnar Corrugators Pvt. Ltd. (2023) LiveLaw (SC) 12

The Madhya Pradesh High Court ruled that the MSMED Act prevails over the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002, due to the overriding effect of Sections 15 to 23.

• Bajaj Electricals Ltd. v. Chanda S. Khetawat and Anr.

The Bombay High Court emphasized that the MSMED Act was enacted to ensure smooth and timely payments to micro and small enterprises and has overriding authority over conflicting laws.

• Magnus Opus IT Consulting Pvt. Ltd. v. Artcad Systems (2022) LiveLaw (Bom) 354

The Bombay High Court observed that if the MSME Facilitation Council fails to conclude arbitration within 90 days, as mandated by Section 18(5), the arbitration process becomes ineffective, and the aggrieved party must seek recourse under Section 29A of the Arbitration and Conciliation Act.

• NBCC (India) Ltd. v. State of West Bengal and Prs. (2022) LiveLaw (Cal) 214

The Calcutta High Court ruled that objections to the applicability of the MSMED Act to works contracts must be raised and resolved within arbitration proceedings before the MSME Council.

• Gujarat State Civil Supplies Corporation v. Mahakali Foods Pvt. Ltd. (2022) LiveLaw (SC) 893

The Supreme Court held that a reference to the MSME Facilitation Council is valid even when an independent arbitration agreement exists, allowing the Council to proceed under Section 18.

• Steel Authority of India & Anr. v. MSEFC AIR (2012) Bom 178

The Bombay High Court clarified that arbitration under Section 18 of the MSMED Act does not invalidate an independent arbitration agreement unless inconsistencies arise.

• Reliance Communications Ltd. v. State of Bihar, Patna HC WP 8077/2018

The Patna High Court ruled that Section 18(3) does not imply that a conciliator can act as an arbitrator unless agreed upon by the parties.

• Cummins Technologies India Pvt. Ltd. v. Micro and Small Enterprises Facilitation Council, WP 7785/2020 Allahabad HC

The Allahabad High Court held that Section 18(3) of the MSMED Act, which allows the MSEFC to arbitrate disputes, overrides Section 80 of the Arbitration Act.

• Ved Prakash v. P. Ponram, OSA No. 231/2019 Madras HC

The Madras High Court confirmed that, while the MSME Council may proceed with arbitration after conciliation, the same member cannot act as both conciliator and arbitrator without mutual consent.

• Indian Oil Corporation Ltd. v. FEPL Engineering (P) Ltd. C.M. No. 19356/2019 Del HC

The Delhi High Court clarified that the location of the supplier determines the arbitration venue, whereas the arbitration agreement dictates the arbitration seat.

• Fives Stien India Project Pvt. Ltd. v. State of Madhya Pradesh, MANU/MP/0565/2018

The Madhya Pradesh High Court ruled that the 90-day limit for MSME Council arbitration is directory, not mandatory.

• Goodyear India Ltd. v. Norton Intech Rubbers Pvt. Ltd. (2012) 6 SCC 345

The Supreme Court, relying on Snehadeep Structures Pvt. Ltd. v. Maharashtra Small-Industries Development Corpn. Ltd. (2010) 3 SCC 34, held that courts cannot waive or reduce the mandatory 75% pre-deposit requirement under Section 19, but they may allow instalment payments.

Chapter I of Part II of the Arbitration and Conciliation Act, 1996 (Sections 44 to 52) deals with the recognition and enforcement of foreign arbitral awards under the New York Convention (1958) by Indian courts. On the whole, Indian  Courts have a pro-enforcement stand making  India an arbitration-friendly jurisdiction, aligning with global arbitration standards.

Section 44 defines a foreign award as an arbitral award arising from disputes of a commercial nature, made in a country that is a signatory to the New York Convention and notified by the Indian government. As per Section 45, if a party initiates a legal suit despite an arbitration agreement, the court must refer the parties to arbitration, unless the agreement is invalid. Again Section 46 says that a foreign award is considered binding and can be relied upon in any legal proceedings in India.

The Enforcement Procedure of a foreign award is dealt in Sections 47 to 49. As per Section 47 a party seeking enforcement must submit:

1. The original or certified copy of the award.
2. The original or certified arbitration agreement.
3. A certified translation if the award is in a foreign language.

As per Section 48, the Courts may refuse enforcement of a foreign award only on limited grounds, similar to Article V of the New York Convention, including:

1. Lack of proper notice to a party.
2. Incapacity of parties or invalid agreement.
3. Award beyond the scope of arbitration.
4. Violation of natural justice or improper procedure.
5. Award set aside in the country where it was made.
6. Violation of Indian public policy (e.g., fraud, corruption, or fundamental legal principles).

As per Section 49, if no valid objections are raised under Section 48, the award is deemed a decree of an Indian court and is enforceable as a domestic court judgment.

As per Section 50, an appeal can be filed against a court decision refusing enforcement of a foreign award but not against a decision allowing enforcement. Section 52 clarifies that other laws and treaties concerning foreign awards remain unaffected.

• The Micro, Small and Medium Enterprises Development Act (MSMED) (hereinafter referred to as Act) provides a very quick and effective means of money recovery for micro and small enterprises. Section 15 to 25 of chapter V of the act covers the same. These special privileges are for micro and small enterprises. A small enterprise growing to medium can also avail these remedies for getting the delayed payments. 

• A small enterprise, if engaged in manufacture or production of goods, is one where the investment in plant and machinery is more than 25 lakh rupees but does not exceed 5 crore rupees. In the case of an enterprise engaged in providing services, it will be treated as a small enterprise where the investment is more than 10 lakhs rupees but does not exceed 2 crore rupees. 

• A micro enterprise is an enterprise engaged in the manufacture and production of goods and where the investment in plant and machinery does not exceed 25 lakh rupees. In the case of an enterprise engaged in providing or rendering of services, for a micro enterprise, the investment in equipment shall  not exceed 10 Lakh rupees. 

• As per section 15 of the act, if a supplier supplies any goods or renders any services to any buyer, the buyer shall make payment on or before the date agreed upon between him and the supplier in writing or when there is no agreement in this behalf, before the appointed day. Here a supplier means a micro or small enterprise. As per section 2(b) of the act, the appointed day means the day following immediately after the expiry of the period of 15 days from the day of acceptance or the day of deemed acceptance of any goods or services by a buyer from a supplier. The period agreed between the supplier and buyer, in writing, shall not exceed 45 days from the day of acceptance or the day of deemed acceptance.

• As per section 16 of the act, if a buyer fails to make payment of the amount to the supplier as required under the act, the buyer shall be liable to pay compound interest with monthly rests to the supplier on that amount from the time of the appointed day or from the date immediately following the date agreed upon at 3 times the bank rate notified by RBI. If the claimant has received the principal already, the claim can be filed for interest alone. 

• As per section 18 of the act, if a supplier has a dispute with a buyer, in regards to any amount due, he may make a reference to the micro and small enterprises facilitation council (MSEFC)(hereinafter referred to as Council). On receipt of a reference, the council shall either itself conduct conciliation in the matter or refer the matter for conciliation to an institution providing ADR(Alternate Dispute Resolution ) services. The provisions of the delayed payments under the act, are not applicable to foreign buyers. Even a government department as a buyer can be proceeded against in the council. 

• MSME Samadhan portal is a portal where micro and small enterprises can file their applications online regarding delayed payments. For the purpose of applying to the MSEFC, the micro or small enterprise shall have a valid UDYAM registration. The application filed online will be forwarded automatically to the concerned MSEFC which will take action on the application. The claim should be submitted in hard copy also. 

• To file an application on MSME samadhan portal, work order is compulsory. In case the purchase order is oral, an affidavit to that effect is to be submitted. A legal notice by the supplier to the buyer is not necessary before filing the case in the council. 

• If the conciliation under section 18 is not successful, the council shall either itself take up the dispute for arbitration or refer it to an institution or centre providing ADR services. For the purpose of this conciliation and arbitration, the jurisdiction of the MSEFC or the Alternate Dispute Resolution centre will be the supplier’s jurisdiction and the buyer can be located anywhere in India. Every reference to MSEFC under section 18 shall be decided within a period of 90 days from the date of making such a reference. An award passed by the MSEFC can be executed under section 36 of the arbitration and conciliation act, 1996.

• If a person wants to set aside the decree, award or order passed by the MSEFC, then they can file the application before the jurisdictional court under section 34 of the Arbitration and Conciliation Act 1996. If it is by the buyer, then he needs to deposit 75% of the amount in terms of the decree award or the order as a condition for filing the setting aside application. Furthermore, the court considering the application to set aside the decree, award or order, shall order a reasonable percentage of the amount deposited to be paid to the supplier. 

• As per section 22 of the act, where any buyer is required to get his annual accounts audited, under any law, such buyer shall furnish several information about the principal and interest amount due to any supplier at the end of each accounting year and several other connected information. If anybody intentionally contravenes the provisions of section 22, he shall be liable with fine which shall not be less than 10 thousand rupees. 

• If the buyer is claiming rejection of goods for quality deficiencies, then the rejection should be genuine within 15 days of the receipt of the goods and its immediate communication to the supplier. 

ISSN is an internationally accepted unique eight digit code used for identifying newspapers, magazines and other print or electronic periodicals. It was developed in the 1970s by the International Organization for Standardization (ISO). ISSN serves as an identification mode and is not indicative of any information such as place of origin, content of the periodical, quality/standard of information etc. It is a numeric code that does not have any intrinsic meaning. ISSN also does not confer title or IP of any nature.
Since ISSN is an identification mechanism, all issues of the periodical, magazine will have the same number. As opposed to ISBN (International Standard Book Number) which changes for each book, even if in a series, ISSN remains constant.

The assignment of the ISSN is done by the National Centre ISSN and for countries that do not have such centre, the International Centre ISSN, Paris assigns the number. The Indian National Centre for ISSN is located in New Delhi.

An application should contain the name of the periodical, frequency of publication, intended start date, name and address of publisher. For existing publications, a copy of the relevant issue along with details of the publisher will have to be furnished. Application and allocation of ISSN is currently free of cost.

Asked, what is the use of the ISSN when it does not confer right or title, it can be equated to having an UID in the digital or periodic world.

Authored by:
Naqsha H Biliangady
Advocate

Section 27 of INDIAN CONTRACT ACT, 1872, declares agreements by which any one is restrained from exercising a lawful profession, trade or business of any kind as void.
An exception is provided while selling of goodwill of a business. Accordingly one who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits; so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business.
The Supreme court has in Superintendence Company of India ( P ) Ltd . vs . Sh . Krishan Murgai reported in AIR 1980 SC 1717, held that post service restraints are void under section 27 of the Indian Contract Act. In the given case there was a negative covenant not to serve anywhere else or enter into competitive business in similar lines. Supreme Court held that restriction contained is restraint of trade and therefore illegal and unenforceable under Section 27.
In Niranjan Shankar Golikari vs. The Century Spinning and Mfg . Co . Ltd , reported in AIR 1967 SC 1098, Supreme court has held that negative covenants which are operative during period of contract do not fall under Section 27.
In VV Sivaram and Ors . vs . Foseco India Limited reported in 2006(1)Kar LJ 386, Karnataka high court held that disclosure of confidential information after cessation of employment by an employee can be restrained and the same is not hit by section 27 of the Indian Contract Act..